Coloradans have until the end of the month to take advantage of thousands of dollars in federal tax breaks for electric vehicles. 

Known as the Clean Vehicle Credit, the benefit provides a tax discount of up to $7,500 for a new electric car, and up to $4,000 for a used one. It expires on Sept. 30. 

The tax credit was approved as part of the Inflation Reduction Act in 2022 and initially set to last through 2032. That timeline was cut short, however, by Congress’ recent tax and spending-cut law, known as the “one big, beautiful bill,” which is also winding down several other tax incentives for clean-energy home upgrades. 

The electric vehicle credits are income-based. For a new car, the benefit applies to people whose adjusted gross income is no more than $150,000 or $225,000 for heads-of-household. For joint tax filers, they must make no more than $300,000 to use the credit. 

For used vehicles, the income thresholds are $75,000 for individuals, $122,500 for heads-of-household, and $150,000 for joint filers. 

The vehicles must also meet certain requirements. For new cars, that includes having a battery capacity of at least seven kilowatt hours and having undergone final assembly in North America. For used vehicles, the car’s sale price cannot exceed $25,000, not including taxes or title and registration fees, along with other requirements. 

While the federal incentive ends on Sept. 30, Colorado will continue offering a state-level tax credit for electric vehicles, though the benefit will be considerably smaller next year. 

Currently, the state’s base tax credit is worth $3,500, but that will decrease to $750 starting on Jan. 1, 2026. The decrease is due to projected state revenue shortfalls. 

More information on the expiring federal tax credit can be found at IRS.gov/clean-vehicle-tax-credits. Information on the state tax credit can be found at EnergyOffice.colorado.gov/transportation/grants-incentives/electric-vehicle-tax-credits.